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By Kirstin Ridley
LONDON, May 27 (Reuters) - Three former Barclays traders appeared in a London court on Tuesday as Britainformally began its first criminal proceedings against U.S.-basedLibor traders, part of a global investigation into allegedrigging of benchmark interest rates.
The Serious Fraud Office (SFO) alleges that Jay Merchant,43, a director of dollar fixed-income swaps, and interest ratederivative traders Alex Pabon and Ryan Reich, aged 35 and 32respectively, conspired together and with others to defraudBarclays and its entities between 2005 and 2007.
The men, who spoke only to confirm their names and dates ofbirth, were ordered to appear before a higher Crown Court onThursday.
Lawyers for Reich and Merchant have said their clients deny any allegations of wrongdoing. Pabon's lawyer declined comment.
British and U.S. prosecutors have charged 16 individuals todate in connection with the investigation into alleged riggingof benchmarks such as Libor (or London interbank offered rate),against which around $450 trillion of financial contracts fromderivatives to credit card loans are priced worldwide.
U.S. and European regulators have meanwhile fined 10 banksand brokerages - including JPMorgan, UBS,Deutsche Bank, Royal Bank of Scotland andICAP - more than $6 billion over their alleged role in ascandal that has undermined faith in the financial industry.
NO EXTRADITION NEEDED
Merchant, Pabon and Reich voluntarily attended London'sWestminster Magistrates' Court without the need for the SFO tostart extradition proceedings and have been allowed to remainresident in the United States under their bail conditions.
But they each have to pay a 50,000 pound ($84,200) securityto the court, which they will forfeit if they fail to appear forhearings. The next hearing has been scheduled at London'sSouthwark Crown Court.
The SFO has charged six former Barclays staff to date overthe alleged scam, after in February charging three formerLondon-based Barclays Libor submitters - Peter Johnson, JonathanMathew and Stylianos Contogoulas.
The investigation into benchmark interest rates has latelybeen partly overshadowed by a parallel global inquiry intoallegations of foreign-exchange market rigging, which has led toaround 35 people globally being suspended, placed on leave orfired.
However, the inquiry into alleged fixing of Libor andrelated Euribor rates has been gathering steam. British and U.S.watchdogs fined brokerage RP Martin $2.3 million two weeks agoto settle claims its staff helped manipulate Libor, and in Marchthe SFO charged three former ICAP brokers.
Barclays was the first bank to settle U.S. and UK regulatoryallegations of rate manipulation, paying around $450 million infines in 2012. Regulators admitted privately they were takenaback by an ensuing public and political backlash, which forcedout four top Barclays directors including Chief Executive BobDiamond, sparked a fraud squad probe and several parliamentaryreviews.
The British bank was last week fined another 26 millionpounds for failing to prevent a trader from allegedlymanipulating gold prices. ($1 = 0.5936 British Pounds) (Editing by David Holmes)
